Skip to main content

tv   Mad Money  CNBC  September 17, 2012 11:00pm-12:00am EDT

11:00 pm
i'm jim cramer and welcome to my world. >> you need to get in the game! >> firms are going to go out of business and they're nuts! they're nuts! they know nothing! >> i always like to say there's a bull market somewhere. >> "mad money," you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. others want to make friends. i want to save you money, my job is not just to entertain you but to save you money. tonight i'm letting you in on something big, the method to my madness. i know this show is the most crazy and bizarre thing on television but i know you won't find this good of investing
11:01 pm
information anywhere else or else you wouldn't be watching. i also know you tune to see if tonight is the night the show goes off the rails! always a possibility. sorry, guy, there is a tape delay. keep wishing. you're going to want to keep watching. i believe that you can do everything i do at home if you're willing to put in the time and the effort. investing, specifically actively investing in stocks, running your own portfolio rather than dumping your money with some buy and forget index fund is something anyone can do as long as can you spend several hours a week doing the homework. i'm including watching the show to research these stocks because the research is so readily
11:02 pm
available, cnbc.com, street.com, yahoo! or websites of companies, anything you're thinking about buying or keeping up on you can get info on. actively managing your own portfolio is essential. index funds mimicking market returns is not enough. you got to do better. but how do you start? this show is all about the method or methods to my madness. how do i pick stocks? that's the question everybody would love to know the answer to. that's what i'm always asked. tonight you're going to get a piece of that answer. the truth is i've got far too many methods to ever cover all of them in one show but i want
11:03 pm
to give you the tools of my trade so can you pick stocks like yours truly on your own or do better than i am. you don't have to follow as many stocks as i do to be successful. i have to be generalist on "mad money." you have a better luxury of just researching what own or are thinking of buying. at the bottom the show is to educate you. what i really like to do is empower you. that starts with teaching you all the tricks i use to pick out great stocks and trade them like a pro, methods that have served me well for over 30 years of investing and allow me to generate a 20 return after fees at my old hedge fund.
11:04 pm
these skills guide me as i manage my charitable trust, which you can always follow along at actionalertsplus.com where i tell you everything before i ever pull the trigger. now let's get rolling. one of the easiest ways to identify potential cramerica names is by watching the stocks that appear on the new high list. stocks on that illustrious list, the highest of the high, obviously have to have something going for them, right. only the best of the best can hit new highs when the market's falling apart. so what's it tell you when the stock is on the new high list? either that it's part of a genuine bull market or part of a cohort of it or the company itself has some serious momentum. no matter how they get there, many stocks on the new high list often keep going higher. now, on a great bull market, like the one at 2009 almost has to double. we saw this success of investing in the new high list over and over again. the same stock would hit new
11:05 pm
high after new high after new high. following them turned out to be a great way to make money, even as the bears claimed endlessly that the bull market was false and couldn't be trusted. listening to the bears caused you to miss out on one of the greatest rallies in history. i got to keep you from ever doing that again. generally speaking things have worked well and things that have worked well continue to work well. i am not saying you can chase stocks that are hitting their highs because they'll keep going higher. i'm sure some of you will no doubt qualify, that's what i'm saying, i'm sure some of you will pick only -- that would be the ultimate in foolishness. i'm not bozo the clown offering bozo behavior. if you want to identify stocks that will be winners in the future, looking at biggest winners in the present has tended to be a pretty good place to start looking. that's the thing about the
11:06 pm
market. it's not always that hard to play once you understand there's often more continuity to it than change. things pretty much keep going the way they were going until something major shifts and then yes, indeed you have to alter your course. those changes can be pretty radical and that's why you always have to learn. the book holds up because it's about methodologies. when you're looking for stocks to invest in and hunting for the next bull market like do i every weeknight between at 6:00 and then 11:00 p.m., that's eastern of course, you have to start somewhere, and looking at the new high list, that's a terrific place to begin. it's a terrific already sorted through list. now, i don't just pluck names off the new high list because i
11:07 pm
think, hey, these stocks have been going up, they'll keep going up. so why don't i recommend them on the show? lazy, irresponsible chasing of momentum. i am many things, a lot of them negative, but lazy and irresponsible, i apply the same standards of rigor as i did at my hedge fund where people paid me a lot of money. what i do and what you should do is wait for something to pull back from the new high list. that's a discount from something that's full price. that's when you pounce at a retail store, that's when you pounce in my store. it gives you a good lower price entry point in a stock that's probably got a lot of positives going for it. i'm not telling you to chase momentum. you should always be conscious of price and try to buy on weakness, just like you want to sell into strength. i don't want to you look at the new high list tomorrow as your new shopping list and just buy something.
11:08 pm
it's a fabulous way to identify potential stocks to buy. you only buy stocks that have pulled back from the new high list if you're confident they'll make a comeback for some substantive reason. you have to do all the same homework you ordinarily do. you have to have conviction. the biggest caveat of all when you're shopping for stocks that have pulled back from their highs, make sure they haven't pulled back for a good reason specific to the company. be certain you're dealing with a momentarily damaged stock and not a troubled company going down, down, down, down. how can you tell the difference? if the fundamentals haven't changed, it's pulled back for mechanical reasons, profit taking, some panic in the market in general, macro issues, europe, that kind of thing. now more than ever thanks to the fact that stocks are traded like commodities by ultra leveraged
11:09 pm
hedge funds, or double related etfs, you're going to see stocks at good companies pull back from their highs. those are the buys. if the fundamental picture changes, if whatever made that stock attractive to climb to the high list goes away, the stock is no longer a viable candidate. the story has to be intact or this method will not help you one bit. i tend to like stocks that pull back between 5% and 8% from the high when they're on the new high list is my sweet spot. i've discovered that to be the optimal level of a pullback. less than that and you might be too early. more than that and maybe something indeed is very wrong with the stock. that's the first method for cramer's madness. watch for stocks that have pulled back from the new high list. some of my best picks from the show have come out of this process. hopefully some of yours can, too.
11:10 pm
let's go to nate in illinois. >> caller: booyah, jim. how's it going today? >> real good. how about you, partner? >> caller: pretty good. my question is how can i bring more growth to my portfolio as a young investor? >> i want to congratulate you that you're interested and this is the right age to do it. you've got your whole life. if you pick something a little dicey and it goes down, that's okay. second, i encourage you to try to find the companies that are growth stocks that i highlight over and over on the show, you're going to constantly hear me say growth stock, growth stock, growth stock, write it down and pull the trigger if you like it. michael in new york, please? >> caller: thanks, jim. i enjoy the show. thank you for helping me make money for my family. >> thank you for saying that.
11:11 pm
>> what do you gain by a dividend if the share goes down by the dividend and you have to pay tax on the dividend? isn't paying dividend to stocks not an apple-to-apple comparison because you're at greater risk of losing your principle to stock as compared to the ten year? >> let's get empirical. what stocks have outperformed for the last decade, 20, 30, years, stocks that paid good dividends. reinvested dividends, they greatly outperform stocks that don't. i'm getting this from jeremy segal's work. go get his book. a pullback can be the market giving back. do the homework, don't chase momentum. it's a starting point, not an ending point. "mad money" will be right back. >> don't miss a second of "mad money."
11:12 pm
follow @jimcramer on twitter. tweet cramer, send jim an e-mail, or give us a call. miss something? head to madmoney.cnbc.com. throughout our lives. one a day men's 50+ is a complete multi-vitamin designed for men's health concerns as we age. it has more of 7 antioxidants to support cell health. one a day men's 50+. the silverado's powertrain warranty is 40,000 miles more than ford. and this workhorse gives you the power of a v8
11:13 pm
with the highway fuel economy of a v6. incredible! right? an amazing test drive. i agree. [ male announcer ] it's chevy truck month. now during chevy truck month, get 0% apr financing for 60 months or trade up to get the 2012 chevy silverado all-star edition with a total value of $8,000. hurry in before they're all gone!
11:14 pm
11:15 pm
welcome back to tonight's methods to madness show where i'm revealing some of my best tricks for buying and selling stocks. think of me as penn and teller of the stock market. with a physique that's a whole lot more like teller than penn. i'm going to pull back the curtain and tell you what to buy and what to sell. some knowledge and a bunch of disciplines that can make you mad money if you master them. you don't have to be genius, you don't have to be all that smart. you just have to put in the work. let's move on to more important things like how to find stocks that are great buys. earlier i was talking about
11:16 pm
picking off stocks that had pulled back from the new high list because you get a cheaper entry point in a stock that's proven a winner. 5% to 8% optimal. don't buy them off the new high list because you're paying too much for them. you can usually get a better deal if you're patient and wait for weakness. there are very few occasions when buying a stock right off the new high list is justified. but sometimes a stock is so sizzling that you have to buy, buy, buy as soon as you can. you won't find these often. they're very rare. but when you find them, you got to remember not to buy all at once. if you want to buy a hundred shares of a stock, you think it's got so much mojo, i'll bless buying 25 shares, even at the high list. believe me, there's always another stock to find, always another train coming to the station. i've got one exception where i'm okay to buy a stock that's
11:17 pm
actually hitting a new high. if you see insiders buying the stock when it's at a 52-week high, that's a clear signal. it's a rare thing to see happen but have i seen it. it's rarer still that this method of picking stocks doesn't make you money. i love it when i see insiders buying at the high. it's a great sign of their confidence in the business. who knows better than the people running it, right? normally insider buying ranges from meaningless to a small but on its own insufficient reason to buy a stock. a lot of times insiders buy their stock because they want to create an impression of confidence. they know if they're seen buying their own stock, they know the market is going to smile upon them so they play the system. hey, that's fair, but it means we ignore most insider buying because it could be sketchy. that said when you get truly colossal insider buying, if it's not at the high, then you might want to take another look at the stock. it's a pretty powerful
11:18 pm
endorsement when the insiders buy a whole lot of stock. it's really the volume of the insider buy that declares its sincerity. there is nothing more arrogant than when an insider backs up the truck for its own stock when it's sitting at a 52-week high. they're saying we know we rock, we're so darn confident it will keep going higher, we're going to buy stock hand over fist. we're not going to wait for a pull back. arrogant, sure. corporate insiders aren't fools. if their stock is on the 52-week high list, let's assume they probably know what they're doing. not everyone deserves the benefit of the doubt in this business. after the market meltdown at the end of 2008, a lot of people think all execs are crooks.
11:19 pm
healthy skepticism is one thing. total unwillingness to believe anything positive is nihilistic, something entirely different. if you're going to own stocks, you need to be willing to extend some measure of trust to the people who run the companies you own shares of. that's part of life. getting their stock to a 52-week high and buying shares is a pretty good darn reason for giving them the benefit of the doubt. or perhaps they've been contacted by other companies for potential purchase and they're betting they can go much higher on their own. most investors are smart enough to wait for a pullback. insider buy at the high tells me these people don't think there will be a pullback. that's the best of all possible worlds and it doesn't happen all that often. one more method, when you see insiders buying a stock at its 52-week high, you might want to be buying, too. after the break i'll try to make
11:20 pm
you even more money. build your future -- >> thank you for not just the money, jim, but what the money translates into, in my case a college education for my son. >> thanks a lot for your passion for stocks. "mad money" does work for the small investor like me. >> mad money, you're making me money for college, i love you, jimbo, booyah! >> how many other shows have kids calling in and saying booyah?
11:21 pm
♪ [ male announcer ] introducing a stunning work of technology. introducing the entirely new lexus es. and the first-ever es hybrid. this is the pursuit of perfection. how did i get here? dumb luck? or good decisions? ones i've made. ones we've all made. about marriage. children. money. about tomorrow. here's to good decisions. who matters most to you says the most about you. massmutual is owned by our policyholders so they matter most to us. massmutual. we'll help you get there.
11:22 pm
11:23 pm
♪ ♪ >> you're in luck because you've caught cramer on a real good night. i'm not going home to sip cheap scotch on my dirty linoleum floor. i'm a believer. i'm in high gear. pull out your pencil and paper and start jotting things down. what i'm about to tell you could be incredibly useful for your portfolio. it's better than giving you stock picks. i'm giving you some of the best ways i know to pick stocks. i'm teaching you to invest and
11:24 pm
trade like cramer. not to be like me because, okay, so i got some emotional issues but frankly you'd probably prefer not to emulate. that is off track. so far i've given you away two of my precious secrets, still use for my charitable trust, where unlike lady gaga i play with an open hand, not a poker face. lady gaga is better than pink. i look for stocks that are pulled back from the new high list. that's not a reason to buy in and of itself but a great place to look for potential buys and i like to buy stocks around their new high list and have substantial insider buys. it says the people running the company still believe their stock has legs. if they believe, it could be good reason for us to buy, too. these are pieces, okay, pieces of the puzzle. you have to do the homework, check the fundamentals, check the web site to make sure you like the story behind the company before you dive in and
11:25 pm
buy. that way if the stock goes down, you know to buy more rather than cut and run and lose. what i'm teaching you tonight are really tells, signals that stock might be worth your time and effort to go through the often incredibly boring process of reading through the quarterly conference calls that could be 30, 40 pages. to narrow down those that might be attractive, that's a method worth having. we talked about insider buying at the high. there's one other scenario where insider buying makes for an incredibly bullish tell and that's when you have a stock that has an incredibly heavy short position. meaning a lot of bears out there have borrowed shares, sold those shares and are now waiting for the stock to go lower so they can buy them back. and profit by returning the
11:26 pm
stock to the bank they borrowed it from and collecting the difference between the price they sold at first and the price they bought the stock back at later. it's hard for some people to understand. i want to you think of shorting as like regular investing only in reverse. what do we try to do? buy low and sell high. successful shorts try to sell stocks they think are going to go lower and they buy them back and collect the difference. if a stock has a lot of shorts, it means a lot of people have serious conviction that stock is headed dramatically lower. when you're short, let's face it, the potential downside is infinite. when you own a stock, a stock does stop at zero, right? shorts lose money when stocks go higher. is this really a lid to that? no. the other important note of short sellers is if there's a lot of them and a stock all of a sudden gets great news, we get what is known as a short squeeze and it sounds exactly like it
11:27 pm
is. it's squeezed up. in order to bail on their positions, the shorts have to buy. that's called covering. when you're buying a short back, that's called covering the short. when a lot of shorts cover at the same time in a panic, and that happens quite a bit, the stock will surge just like if everyone were to sell at once and the stock goes down hard. you have a lot of people desperate to buy the stock, a lot of demand. they have to buy unless they want their years wiped out. many short sellers in 2010, hedge funds, got their years blown away when the market refused to quit. so where does insider buying fit in the short selling equation? you're looking for a stock with a giant percent of the float or what trades is shorted or sold short, when some of the people who run the company start buying shares for themselves, bingo, that's your chance.
11:28 pm
and this is an explosive combination. shorts are smart. in fact, a lot of times they do tend to be smarter than regular long side buyers but they usually don't know more about a business than the insiders who run it. if a lot of people are shorting a stock and management is buying it in sizable amounts, not just in hundreds of shares worth, then you should start doing some homework and usually you're going to want to side with management. as the shorts panic and push it up big in their desperation to buy. might be big losses. might be they want to ring the register all at once. when a company that shorted stocks announced a gigantic buyback, that's another
11:29 pm
situation where management is contradicting the shorts. i teach you how to identify bogus buybacks in my charitable trust bulletins at actionalertsplus.com, a substantial new buyback is a good reason to take a look at the stock. it's one of the reasons i like to read the quarterly report, to tell you how much they bought back. you have to be careful dealing with a company that's in the cross hairs of the shorts. the shorts do have the ability on their own, legally or not, to wreck a stock, even if the fundamentals of the underlying company are fantastic. >> these days shorts, they got tremendous fire power. and i think more in part of an s.e.c. that looks the other way when they raid stocks with bogus stories. it's called fomenting a decline. it's not allowed but it happens anyway.
11:30 pm
it's pretty easy to drive stocks down if there are no rules that slow short selling and make it harder to create a race. in the '30s, it was like looking for a higher price before they could short a stock. of course it just made things more fair for the shorts. it is a leading reason why so many home gamers have left the building. but government doesn't seem to care. we established the uptick rule in order to stop the fomenting of panic. but the government now in all of its wisdom seems to think that panics are no longer possible. it's much easier just to panic people in a financial than it is in a regular business that doesn't involve credit. without those protections the
11:31 pm
shorts were able to run wild and practically assassinate the stocks of those financial companies in 2008 until the generational bottoms in 2009 did put the bulls back in control. when you're dealing with a heavily shorted stock in one of etfs, you've got to tread very carefully. you can find great opportunities in stocks where the shorts have overreached but i got to warn you the balance of power has shifted against you and in favor of the shorts, against the regular investor in favor of the hedge funds. that means even if the short sellers are wrong about a dp's process, please don't underestimate. short sellers have to borrow
11:32 pm
stocks to short. the borrower pays that dividend. believe me it is the best protection can you get against short sellers. >> bottom line plus insider buying plus heavy shortages can equal good opportunities, as long as you avoid and determined to struck the stock. >> caller: let's go to georgia, to bart. >> caller: a big georgia booyah. >> caller: are there reasons stocks change their ticker symbol? does this have any effect on stocks? >> not really. when i was at thestreet.com, you know i'm a big shareholder, i
11:33 pm
founded the company, the symbol was tsem, the president wanted to do a little facelift. tst, they changed the symbol. that happens a lot and companies want to change their names. it's really the fundamentals that matter. let's go to rich in new york, please. rich. >> caller: hi, jim. for a beginning investor new to the stock market, would you advise shorting stock? and could you explain how one would make money trading in that manner? >> no, i do not advise shorting stock because losses from shorting can be infinite. i would prefer to you buy puts and that way you protect your upside -- you protect your down side actually, it's a mirror image. go to getting back to even. i describe a hundred pages how it's better to buy puts.
11:34 pm
insider buying when there is short business, that can be a situation that can explode to the up side. stay with cramer. there's nothing worse than going to the post office and waiting in line. i don't have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps.com, you can print real u.s. postage for all your letters and packages. it gives you the exact amount of postage you need the instant you need it. can you print only stamps? no. first class. priority mail. certified. international. and the mailman picks it up. i don't leave the shop anymore. [ male announcer ] get a 4-week trial plus $100 in extras including postage and a digital scale. go to stamps.com/tv and never go to the post office again.
11:35 pm
11:36 pm
11:37 pm
welcome back to my method to the madness episode, the craziest, most enlightening, entertaining show. we're talking about all the methods that made me a pretty darn good money manager and one that helps me put together the show every night. i'm trying to enlighten you about what's behind the scenes. that way i can make you the most money. i want to teach you how to do what i do so you can do it yourself. i want to teach you about a way to trade them now. we were doing investing. now we're trading. this is a discipline incredibly useful, especially in volatile, crazy markets. this is the thing i get the most about at @jimcramer on twitter, it's called trading around a core position.
11:38 pm
according to my critics, i'm all about trading. i don't have any advice for regular investors, i'm all short term. that's entirely untrue. this show is mostly about long-term investing. get dividends? you can't do that if you short term. i will admit i was a darn good trader but now i can only trade for the charitable trust. that's really longer term. much different from my hedge fund. i'm not allowed to short sell or use options. those are two weapons i advocate you use when you think it's right. but be careful, these are not for beginners. it pays to put disciplines into practice. trading is about profiting from short-term fluctuations in stock prices. sometimes these moves are caused by a catalyst. sometimes they're the result of a topsy turvy market. in markets like 2011, remember we were subject to gigantic swoons, intra day swoons?
11:39 pm
i want you to profit from it. what does it mean to trade around a core position? first you need a stock. so why don't you pick one you like, one you got an opinion about, one where you have a bias, a directional bias. find a stock that you believe will be going higher over the longer term. what you're really looking for here is a great company with a stock that can get tossed around by market volatility but that you think will ultimately be headed higher if you are patient. so we know it's getting shot at, we're going to take advantage of it to buy. if you were just investing, you'd set a position in the stock, buying in increments, levels like i talk about because we all know buying all at once is the height of arrogance. let's use amazon.com as an example right now. over the longer term i like it. over the short term it's rocky. say you want to own 300 shares of amazon. the way to set up that position would be to buy 100 shares three times over a period of weeks or months.
11:40 pm
say you want to trade it. remember how all the amateur day traders got blown out when the tech bubble burst? the key word is amateur. you home gamers can make money trading if you do it right. let's come back to our core position. we own 300 shares of amazon. say it's trading $100 a share. i know it's nowhere near there. every time the stock jumps 3%, you sell 50 shares. you shave a little off to bring in some profits. then you wait until something happens to knock the stock down as long as it doesn't change the company's prospects, in other words the market knocked it down. that shouldn't take long given we're in a world where stocks can get crushed by all kinds of factors that have nothing whatsoever to do with selling the merchandise, selling the entertainment stuff, selling on
11:41 pm
fundamentals. as the stock comes down, you buy it back in increments, just like you purchased it. we started with 300 shares. if amazon comes back to 103, you buy back 50 shares. then another 50 at 100 and so on. this might appear to be small potatoes, up 3% sell 50 shares, down 5%, buy 50 shares. all you're doing is watching the stock move and trimming or adding your position. contra the image of trading as irresponsible, trading around the core position is really the height of prudent portfolio adjustment and discipline. we do have some rules to follow. in my example we started with a core position of 300 shares of $100 stock. amazon. if i was trading around that as
11:42 pm
my core position, i would want to own more than 300 shares or less than a hundred because trading around a position for less than 25 shares isn't going to make you enough money to be worth it. you can scale these numbers depending on how big your position is. avoid putting yourself in a spot where you have too much on the table in case the stock gets squatted down or too little to take advantage of upside that comes your way. it's a basic trading strategy everyone can use. now, if you want to take your trading to the next level, the ultimate level, then i recommend reading the two chapters on how to use options to getting back to even. the material is a little too sophisticated for "mad money." if you're willing to put in extra homework and have the time and inclination, it's really worth the effort. the stock i used to demonstrate it, google is one would i never do in common stock if i could avoid it and always do a stock replacement at a more reasonable dollar amount price.
11:43 pm
i just don't like to talk about options on the show. i think they're too risky. bottom line. now you know the basics of how to trade around a core position. yet another method to my madness. one that allows you small gains that add up over time. stick with cramer. >> a hillbilly booya. >> here's a big las vegas ding, ding, ding, ding. >> from al in new york, hey now, forget about it. oh, yeah! >> booyahs come from all across america. "mad money" with jim cramer week nights." bob...
11:44 pm
oh, hey alex. just picking up some, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs.
11:45 pm
can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good. [ male announcer ] fedex office. now save 50% on banners.
11:46 pm
i got one more trick to teach you tonight. one more method to my madness. this time i want to talk selling, which along with when you buy may be the most important undervalued tool in your whole home arsenal. how do you get out before the party ends so you're not one of the last around to get stuck cleaning up the mess?
11:47 pm
there's a lot of money to be made owning hot stocks with lots of momentum. but when you play the momentum game, you got to know when it's time to leave the table. there are always naysayers and they're almost always proven right as sooner or later almost all steaming hot stocks implode. this process happened big in recent years with stocks as diverse as netflix and research in motion. both at one time were among my favorites. made a lot of money with them, for you i hope. it usually happens later, rather than sooner. and the recklessness disguised as prudence costs you a lot of money. people don't know where these stocks are going to top out. i'd be afraid to buy them, too, if i didn't have a discipline that didn't let me know when to get out. luckily i do have one. you're about to learn it. when i i'm talking about hot stocks, i'm talking about speculatives, no blue chips.
11:48 pm
stocks with low market capitalizations. these names can go up and up and up for a very long time. they can catch fire and stay on fire. even for months or years even. the key to figuring out when interest has peaked and it's time to sell is by watching the analysts coverage of all things. yeah, you got to use your own judgment here. a good rule of thumb is once one of these hot stocks has at least a half dozen analysts covering it, the run is going to begin to peter out. it will be too big and too well known. it will no longer be the hot little speculative stock. this formula has worked for me for as long as i can remember. as far as i can tell it works because the number of analysts on a stock is a good gauge of how much awareness and interest there is in a hot, speculative stock. hot stocks get tapped out when there's nobody left to be
11:49 pm
attracted to them, when all the people who would be interested have already bought, they attract more and more attention and everyone who wants piece of the stock has a piece of it. one of the best examples is a company formerly known as hansen natural, which was the hottest stock in 2005, in 2005 and the first half of 2006. it went from $18 and change to $200 when it peaked in 2006. people telling you that hansen that got its momentum from its monster energy drink, so much that it renamed the company monster. ultimately it was a fad that would dry out and crash. well, it did do that but it took years for the momentum to run out. it peaked in july of 2006. the company did a five-for-one split. this encouraged people who had been in hansen for a long time to take something off the table. but there was another reason i
11:50 pm
believed it peaked and that was because it picked up its fourth analyst in may of 2006. that's when goldman started covering the stock. had you two months to sell. there was still upside left after goldman started its coverage but prudence dictated we sell. hansoe, as with pretty much all other hot stocks, started to cool off. after hansen fell off the radar screen, the stock then recharged and powered higher again. it was an amazing renaissance and a testament that when analysts stop following a company but the company's earnings start percolating again, a storied lazarus-type move can happen, especially when it turns out the fad drink vanquished the competition at the major soda brands that everyone said was going to wipe out monster but it didn't materialize.
11:51 pm
after its fall from grace, hansen took out that high in 2011. that's when they renamed the company monster. small, speculative being steamy stocks are worth owning. when you see too many analysts jumping on the bandwagon, use four, six if you have to, to start trimming the position. stay with cramer.
11:52 pm
i know the name of eight princesses. i'm an expert on softball. and tea parties. i'll have more awkward conversations than i'm equipped for because i'm raising two girls on my own. i'll worry about the economy more than a few times before they're grown. but it's for them, so i've found a way.
11:53 pm
who matters most to you says the most about you. massmutual is owned by our policyholders so they matter most to us. massmutual. we'll help you get there.
11:54 pm
let's do some mad mail and some mad tweets. jim, says jen in texas, i'm trying to understand when peg is
11:55 pm
at a level it means to trim a stock. two is too high. jen, it's a rule of thumb. it's kind of a guideline. i think that two is a red flag. if the stock's under 2.1, people want to own it but i don't like it because i've had too many mistakes made over 2. it's just an odds game. >> here's one from ben in pennsylvania. jim, i am a newer home gamer and have a question regarding takeover bids. is there an ideal time to ring the register when a company i own gets a takeover bid? >> i like to ring it immediately. there's always a chance you'll give back the gain. that's unforgivable. then we look for the next big win. let's take some tweets. this one is from @kendoggie. i'm just starting a portfolio. is it better to buy one full position at a time or smaller amounts of all five at once? >> absolutely the latter.
11:56 pm
this is an insurance plan against that happening to you. so, no, i don't want you buying all at once. buy in stages all five. >> how do you determine target prices for your action alerts portfolio? if the fundamentals improve while we own a stock, we can revise our price target up. we want to give them a sense of why we would take something off the table because we always want you to have the move before we make it. that's part what i like about doing that charitable trust portfolio. here's another tweet. this is from @paulsullivan.
11:57 pm
you were tweeting at 4:30 a.m. when do you sleep or do you sleep? i have very strange sleep habits, i admit to that. i try to get four hours a night. many of you ask me that why are you up? why can't i sleep? that's why i'm up. stick with cramer. now, that's what i call a test drive.
11:58 pm
silverado! the most dependable, longest lasting, full-size pickups on the road. so, what do you think? [ engine revs ] i'll take it. [ male announcer ] it's chevy truck month. now during chevy truck month, get 0% apr financing for 60 months or trade up to get the 2012 chevy silverado all-star edition with a total value of $8,000. hurry in before they're all gone!
11:59 pm
try the #1 gastroenterologist recommended probiotic. align. align naturally helps maintain digestive balance. ♪ ooh, baby, can i do for you today? ♪ try align today. to provide a better benefits package... oahhh! [ male announcer ] it made a big splash with the employees. [ duck yelling ] [ male announcer ] find out more at... [ duck ] aflac! [ male announcer ] ...forbusiness.com. ♪ ha ha!

207 Views

info Stream Only

Uploaded by TV Archive on